What’s the outlook for data centers in 2017?
Last year, the data center market saw big deals from major players, new economic and regulatory policy, and the wild card that is strategic cloud adoption. These factors are changing the rules of the game—from pricing models to location selection tactics, and everything in between.
Over the next 12 months, we expect to see user demand for smart data center solutions continue to climb, while operators will feel the heat to deliver more data, faster and more flexibly than ever before.
Get your local data center outlook (published fall 2016).
Mergers and acquisitions in the data center sector surged in 2016, a trend that’s on pace to continue. As the experienced players become bigger, expect less room on the bench for new recruits.
The U.S. data center climate will evolve over the next two years, with influence from the new presidential administration and federal mandates for optimization. Overseas, keep an eye on Brexit proceedings, operator tax breaks and the continued push for data sovereignty.
Expect to see even swifter movement to the cloud in the industry's hub markets, from Silicon Valley and Northern Virginia to London and Tokyo. Already, some major cloud providers are anticipating they will need to
triple infrastructure by 2020.
Wholesale pricing has traditionally been the domain of large-scale projects, but with the rise of hyperscale sites, we’re seeing bulk pricing trend downward, too.
Data center REITs are boasting return on investment typically in the 10-15% range—impressive, compared with other types of funds that are performing more in the single digits. With demand going nowhere, these firm yields signal another year of bottom-line growth.
Learn more about the four factors most impacting data center use, demand and profitability: economic growth, evolving location strategies, new desires for lease flexibility and climate change.
This interactive visualization lets you explore data center demand and use across 17 top U.S. and Canadian markets (data as of fall 2016).
Senior Research Analyst